Tesco is to buy the Giraffe restaurant chain for up to £50m, in a deal which
could see the child-friendly eatery open within the supermarket’s UK stores,
it is understood.

The bold move would give Tesco47 Giraffe outlets and crucially, allow the company to offer its customers a well-known high street brand in-store in a bid to help rejuvenate sales and attract more shoppers.

The deal, which is believed to be imminent, comes after Tesco bought a 49pc stake in Harris + Hoole, the coffee chain, which will see a number of coffee shops open in adjoining premises to Tesco outlets over the coming months. Philip Clarke, the supermarket’s chief executive who succeeded Sir Terry Leahy in 2011, has in recent months promised to make stores warmer and less clinical.

The Giraffe deal will be seen as the latest fightback by Tesco against the shock profit warning last year. After years of underinvestment, Mr Clarke last year committed £1bn to turning around the UK business. The retailer’s sterile supermarkets have already been modernised, extra staff have been hired, and its tired own-brand ranges such as Tesco Value relaunched and rebranded.

Tesco introduced a new price promise this week, by offering customers money-off coupons worth up to £10 if they could have bought their shopping less at a rival.